Financial Information
Is there any advantage to rolling my 401k into a rollover IRA instead of my existing traditional IRA?
Question : Is there any advantage to rolling my 401k into a rollover IRA instead of my existing traditional IRA?
I have an existing traditional IRA and two 401k’s from previous companies. I’d like to consolidate accounts.
Is there reason I should roll the 401k’s into a rollover IRA instead of directly into my existing traditional IRA?
Are there any consequences regarding maybe later converting the IRAs to Roth IRAs later?
traditional ira
Best answer:
Answer by VaTreasures
The only thing you want to treat differently is any company stock from your 401k. Other than that it really does not matter where you put it and there is a lot to be said for having it all in one place.
The traditional IRA was funded with after-tax money. So, when you withdraw at retirement, you pay taxes on only the added value of the investment, not the money you initially put in.
You create a rollover IRA because this will have your 401K money which is pre-tax money. When you withdraw, you pay income taxes on all of it.
I’m going through this now, so I’ve done all the research on it.